Determination of Creamy Layer is not simply based on parents' income, but on social status
A Division Bench of the Supreme Court of India passed judgment in favour of the Respondents, Rothith Nathan and others by confirming the order of the Central Administrative Tribunal in relation to an issue regarding disqualification for allocation to service in OBC category because they were treated to be falling within the creamy layer just because their father was employed in private organisation and earned exceeding the prescribed creamy layer limit under the guidelines
Because the
respondent, Rohith Nathan was
treated as falling within the creamy layer, he was recommended by the UPSC as a
general merit candidate and was allocated service in the Indian Police Service
against an unreserved vacancy.
FACT OF THE CASE
The Respondents no. 1,
Rohith Nathan and others had secured their respective rank under the OBC
category. But they were denied the benefit of OBC for allocation to a service
against a vacancy reserved for OBC based on the fact that their fathers’ income
exceeded the prescribed limit. Aggrieved by such disqualification, the
Respondents/Applicants filed an application before the Central Administrative
Tribunal seeking allocation to Indian Foreign Service or any other service as
per his rank and the same was allowed by holding that the inclusion of salary
income of PSU(Public Sector Undertaking) and private sector employees under
Category II-C resulted in hostile discrimination between the wards of
Government Servants and those of PSU/Private Sector employees.
He also
sought to quash the portion of observed by UPSC relating to Category II-C which
deals with the income status of parents in Government service.
The CAT
after hearing the Respondent/Applicant, Rohith
Nathan and others, allowed reallocation of service on the basis of their
OBC status. The Tribunal also held under the Office Memorandum dated 08.09.1993
income from salary and agriculture income stood excluded from the Income/Wealth
Test for determination of creamy layer status.
The Union of
India being aggrieved by the order of CAT filed writ petition before the High
Court of Madras. The High Court
dismissed the petition of two grounds:-
1. The Union of
India has failed to formulate an equivalent/comparable test which resulted in
placing the sons and daughters of PSU employees at a disadvantage compared to
similarly placed Government servants; and
2. Salary income
of parents as Group C and D and post those entering in Group B and C after
entering 40 years serving in State and Central Government was not considered
for creamy layer determination, while salary income of PSU employees under
Category II-C introduced an element of
hostile discrimination.
The Union of
India, Appellants and others then approached the Supreme Court by way of Appeal
to challenge the order/judgment of High Court.
SUBMISSIONS OF
APPELLANT AND OTHERS
The Learned Additional Solicitor
General of India prayed for quashing of impugned judgment of the High Court and
respondents be declared as falling under the creamy layer of the OBC category
on these submissions:-
1. The impugned
judgment passed by the High Court of Madras is unsustainable and deserved to be
set aside. The exclusion of persons falling within the creamy layer is aimed at
ensuring the reservation benefits are not extended to those who are no longer
backward.
2. the removal of
such person is not constitutionally invalid but is in consonance with the
principle laid down in Indra Sawhney vs. Union of India and
Others(1992) wherein it was explained that non exclusion of creamy layer would amount to discrimination
and violation of Article 14 and 16.
4. it was further
submitted that the Union of India was fully competent and empowered to issue
the clarificatory letter, dated 14.10.2004 in order to ensure that the intended
benefits of reservation reach the truly deserving candidates among the backward
classes.
5. by placing
reliance on the case of Ashok Kumar
Thakur vs Union of India (2008), it was submitted that the Government
should not proceed on the basis that once a class is considered backward, it
should continue to be backward for all times. This would defeat the very
approach of reservation – Appellant submitted.
6. it was also
submitted that to sustain the spirit of the constitutional provisions of
equality, it is obligatory on the State to identify the most deserving
candidates, as the State is obliged to remove inequalities and backwardness
from society.
7. the candidates
belong to higher strata of the OBC category by virtue of their parents’ salary
income who are employees of PSU.
8. importantly,
it was submitted that the service status of the parents of persons employed in
PSUs or private enterprises, in which equivalence has not been established in
comparison with Government services is determined by the quantum of salary they
receive and that the inclusion of salary in gross annual income aligns with the
principle substantive equality and prevents distortion of the reservation
system.
SUBMISSION ON BEHALF OF THE RESPONDENT, ROHIT NATHAN
I. The Learned
counsel submitted by pointing the criteria laid down in 1993 Office Memorandum
that socially advanced person with emphasis on social status and high income
from profession, or other sources are excluded from reservation for OBCs while
expressly excluding income derived from salary and agricultural land.
Thus the
1993 Office Memorandum have the statutory force and consistently implemented
and must prevail.
FINDINGS OF COURT
The Hon’ble
Court analysed that since the equivalence of posts in PSUs, banks and other
organisations vis-a-vis Government post had not been determined, the Department
of Personnel and Training applied the Income/Wealth Test under Category VI of
the 1993 OM read with 2004 clarificatory letter. The candidates were classified as falling
within the Creamy Layer of the Other Backward Classes upon assessing the
parental income for the preceding three years thereby rendering them ineligible
of Non-Creamy Layer reservation benefits.
The Court
said that the issues involved are allied and overlapping and need distinct
treatment for analysis. The Court identified two issues that -
a) whether the clarificatory letter of 2004 can
have any overriding or superseding effect over the Office Memorandum of 1993.
b) whether there can be hostile
discrimination between employees of the Government and those working in Public
or Private Sector Undertakings, when both occupy posts of the same grade or
class.
The
clarificatory letter of 2004 lays down the criteria for excluding the benefits
of reservation for OBCs by identifying the creamy layer namely socially
advanced persons of sections among the Socially and Educationally Backward
Classes. It recognises that where equivalence of posts in PSUs and similar
organisations has not been evaluated,
creamy layer status must be determined on the basis of the Income/Wealth
Test. It reiterates that income salaries and income from agricultural land
shall not be taken into account while applying the test.
On the issue regarding clarificatory letter
of 2004, the Supreme Court was of the view that the mere government letter
cannot have the effect of overriding or superseding over the Office Memorandum
issued in exercise of executive power under Article 162 of the Constitution. The
letter must be construed strictly according to the foundational guidelines laid
down in the 1993 OM, which was issued after due deliberation and following the
requisite procedure and not as altering its substantive framework. It is
settled law that a clarificatory instruction cannot introduce a substantive
condition that does not exist in the parent policy.
The Hon’ble Supreme Court observed that the exclusion under the 1993 OM
is status-based rather than purely income-based, reflecting the policy
understanding that advancement within the governmental service hierarchy
denotes social progression independent of fluctuating salary levels.
Mere determination of the status of a candidates as to whether he/she
falls within the creamy layer or the non-creamy layer of the OBCs cannot be
decided solely on the basis of the income.
And that the letter of 2004 has confused the provision of 1993 OM than to
clarify it – the Court noticed.
Thus, according to the Supreme Court,
determination of creamy layer status solely on the basis of income brackets,
without reference to the categories of posts and status parameters enunciated
in the 1993 OM is sustainable in law.
With regard to the second issue, the views
of the Tribunal as well as the High Court were correct that Group C and Group D
employees and by virtue of promotion to Group A and B in the Government service
do not exclude from reservation on the basis of the income, and the employees of
the PSUs and private undertakings cannot be treated from employees Government
service who also belong to or equivalent to such Group C and Group D categories
of post.
Treating the children of those employed in PSUs and
private undertakings as being excluded from the benefit of reservation only on
the basis of their income derived from salaries and without reference to their
post would certainly lead to hostile discrimination between parties who are
similarly placed and would amount to equals being treated unequally – Court said.
The object of excluding the creamy layer is to ensure that socially advanced sections within the OBCs do not appropriate benefits meant for the genuinely backward; it is not to create artificial distinctions between equally placed members of the same social class – Supreme Court observed.
CONCLUSION
The Supreme Court dismissed the Civil
Appeal because the Court found no
infirmities in the judgment of the Tribunal and High Court with the directions
to the Union of India to create supernumerary posts to accommodate the
candidates who satisfy the non-creamy layer criteria. In addition the
Appellants were directed to consider the claims of the respondent candidates
within a period of six months from the date of judgment.
The Supreme Court also took note about the candidates who were successful in the Civil Services Examination of different years and presently their applications, representation or proceedings are pending before the Department of Personal Training(DoPT), the High Courts or the Central Administrative Tribunal would have the entitlement to reservation in the non-creamy layer of the Other Backward Classes(OBC).
Union of India and Others vs Rohith Nathan and Another, Etc (Civil Appeal nos. 2827-2829 of 2018)
Coram: Justice Pamidighantam Sri Narshimha and Justice R. Mahadevan
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